Cracker Barrel: The Starbucks of Country Music

Selling CDs by Brad Paisley, Clint Black and Dolly Parton

By

Don Steinberg

Aug. 1, 2013 8:15 pm ET

Stop into a
Cracker Barrel
restaurant, and there's a poster of
Brad Paisley
hanging above the cash register and a stand-up card featuring the singer in his white hat on every table. Cracker Barrel is sponsoring Mr. Paisley's current North American tour. In the "country store" area that every diner passes through to get in and out of the restaurant, CDs of Mr. Paisley's latest album, "Wheelhouse" are on sale. It's a special edition of the best-selling Sony record, released on Cracker Barrel's own music label, CB Music, with bonus songs recorded exclusively for the restaurant chain.

Brad Paisley
Zuma Press

The Cracker Barrel edition of Mr. Paisley's 'Wheelhouse' album

Mr. Paisley jokes he has mixed feelings about becoming such a presence at a restaurant chain that fed him through college: "I really can't go to eat there now. My face is on the menu. I feel like the Wendy's girl," he says.

With rocking chairs on the front porch and a menu that includes the "Old Timer's Breakfast" (two eggs, grits, gravy, biscuits, fried apples and sausage), Cracker Barrel seems like an unlikely force in the modern music industry. But the down-home dining chain has become a serious niche player, a sort of country version of
Starbucks,
selling well-targeted CDs to its restaurant customers.

"For a long time you would walk up to a counter at a Starbucks and see certain folk albums or rock albums or whatever, and I'd think, 'Wow, they don't have us up there very much.' It's nice to have our own situation,' " Mr. Paisley says.

"You can hyper-target your consumer there," says Brinson Strickland, a talent manager in Nashville whose client
Clint Black
has an exclusive album debuting on Cracker Barrel's label next week. (Mr. Black is currently between labels, so he had no contractual issues.) "They know exactly who their customer is. Cracker Barrel sells exactly the same thing that country music does, which is familiarity and comfort."

Cracker Barrel, a $2.6 billion public company, has music in its roots. Founder
Danny Evins
was a friend of Chet Atkins, who did early advertising spots. The current music-selling program began in 2005 with an exclusive CD by bluegrass band
Alison Krauss
and Union Station (Ms. Krauss and
Willie Nelson
hold the distinction of appearing on both Cracker Barrel and Starbucks CDs).

The music program has been ramping up since. Cracker Barrel has 624 restaurants in 42 states and about four million weekly customers. Every diner passes through a knickknack shop where CDs from Cracker Barrel's own label and others are offered, along with quilts and candles, jars of preserves, and vintage candy brands. (Cracker Barrel cheese, owned by
Kraft
Foods Group, is no relation.) The company says about a third of its diners make a retail purchase.

"We're all fighting for that space," Mr. Paisley says. "You're talking about dwindling shelf space for CDs, for actual physical copies of your album. So any time you can put that thing in front of somebody at a store, it's a win-win."

Music sales aren't a substantial part of Cracker Barrel's overall revenue. "It might be around 1%," says Stephen Anderson, a restaurant analyst at Miller Tabak. That would be comparable to the percentage at Starbucks. But there are marketing gains. In aligning with Mr. Paisley, the chain is reaching out to a younger demographic, an effort it is also making with lower-calorie menu choices, called Wholesome Fixin's, added this year.

"By making a special edition of Brad's album exclusively for Cracker Barrel, it incentivizes their customers to buy the album on the spot because they can't get it anywhere else," says Gary Overton, CEO of Sony Music Nashville.

Based in Lebanon, Tenn., near Nashville, Cracker Barrel has developed connections with labels and management companies. There have been about 25 CB Music releases. The company isn't sharing many sales data, but Mr. Paisley's Sony release "Wheelhouse" sold 100,441 copies overall in its first week; Cracker Barrel stores sold 11,721 first-week copies of its special version, or close to 12% of that total.

Dolly Parton had a CD/DVD hit at Cracker Barrel.
Getty Images

Last summer, a
Dolly Parton
CD/DVD package, "An Evening With Dolly," became Cracker Barrel's first release to be certified gold (which for such combo packages is 50,000 copies sold). Josh Turner's "Live Across America" released last August, has sold 92,960 copies in Cracker Barrel stores.

Next week, Mr. Black's "When I Said I Do" will be released by CB Music and sold in CD form exclusively at Cracker Barrel stores (digital versions will be on iTunes and Amazon).

"It really takes me back to the old days when you put out a CD and the fans knew right where to go to buy it," Mr. Black says. Both Mr. Paisley and Mr. Black say the bonus songs on their Cracker Barrel discs are especially suited for those fans.

"They're sort of bluegrassy and traditional, songs that otherwise are a little more traditional than what I would do just for iTunes," Mr. Paisley says. "I think that's the future of music—because now you can record very cheaply. To cut a song used to cost about 10 grand. Now the technology is all digital, and you have your own studio. So I could easily cut a few more tracks to give them, things that are a little bit niche-y."

Mr. Black and his manager appreciate the straightforward way CB Music structures deals. The company asks for a certain number of CDs and pays the artist a fixed amount per unit. The artist is responsible for manufacturing the discs to meet set specifications, paying musicians, and other expenses.

"It's so counterintuitive to what the rest of the music business is doing, where you need a forensic accountant to know what you are owed in a traditional record deal," Mr. Strickland says.

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